Skype works, but I can't browse web pages

Skype is being used by millions of people around the globe for various purposes, but people are facing the problem of browsing the web while Skype is on due to a network error. This network error can be solved by checking the connectivity of the network line. If this is alright, then check the installation, subnet mask, DNS gateway in the network connectivity options. Click on the device manager, open it and check for network adapters. Then click the plus signal which is next to it. The red X is an indication of a problem on the network card. Do check the network configuration by clicking on TCP/IP.

Issue

I'm trying to set up a LAN connection to connect to the Internet (RJ-45 cable coming from the wall) and I've received a quick guide to set things up on Windows 98. However, I'm running Vista Home Premium and I think they look a bit different. So here's a translation of that guide (original in Finnish):

IP address: 192.168.X.XX

Subnet mask: 255.255.255.0

Gateway: 192.168.1.1

DNS server: XXX.XXX.14.134

Host: type anything

So this is the guide and I'm a bit puzzled with it, to say the least. The thing is that I can use Skype with ease but when I try to browse web pages, it just won't let me do it. Could this be about DNS or something? I've tried pinging both www.yahoo.com and 66.94.230.33 (yahoo's IP address) and when pinging the .com it just says "unknown host".